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The US Drawdown & National Debt Debate: AfPak, Korea, etc

I’ve been thinking a lot recently about the scale of US commitments and how to reduce them so as to not bankrupt the US in the medium-term. I have gotten a fair amount of criticism that I don’t know what I am talking about, US warfighters are superlative, US forces in various places like Korea or Afghanistan augment US national security, pull-outs jeopardize our credibility, etc. Ok. I am learning like the rest of us on this. I agree that US commitments are sticky, and I have little doubt that US servicemen are professional enough to win conflicts in places like Korea and AfPak (Afghanistan & Pakistan), so long as we have the resources to stay.

Further, I will admit that a ‘post-American’ world is a little unnerving. I say this not as an American who likes ‘empire’ (I don’t), but more generally because I still do think, even post-Iraq, that US involvement generally makes the world a better place. The dollar and US engagement help keep the world economy open, and US force can sometimes be the last line against truly awful acts that shame the conscience. This is why I supported the Libya intervention, and this is why I hope the US can keep forces in Korea. A retrenched, bankrupted, and sullen America worries more than just Americans. To clarify to my critics, my concern is whether the US can support allies around the world, not if it should. I don’t want US Forces in Korea (USFK) to leave any more than anyone else. I can think of few more valuable uses of US force than to help defend a democracy against the last worst stalinist despotism on earth. I just wonder whether we can afford it.

I think we need to be a lot more honest about the huge defense cuts that will be required to balance the US budget. The US deficit ($1.5 trillion) is a staggering 10% of GDP and 35% of the budget; publicly-debt ($9T) is at 60% of US GDP ($15T); and the integrated national security budget (DoD, Veterans, relevant parts of Homeland Security and Energy) exceeds $1T. You hardly need to be an economist to think that this is unsustainable and smacks of imperial overstretch. For an expert run-down on the US budget mess, try here.

This gap could of course be filled with tax increases, but a central GOP policy commitment since roughly the Ford administration has been ‘no new taxes.’ Unless this changes dramatically – and the recent Ryan budget proposal showed no GOP movement on tax increases – this means that most of the $1.5T hole must be filled with spending cuts. My own sense is that allowing the Bush 2001 and 2003 tax cuts to sunset, as is current statute, plus tax reform and a carbon tax, could in fact generate a lot of new revenue at tolerable and intelligent levels of pain. This would reduce some of the pressure to cut defense (and all other US government programming). But without such new taxes, the $1.5T hole calls for huge cuts, and the axe would inevitably land on defense too, including US bases and commitments overseas.

I am genuinely agnostic on whether this is a good idea. Part of me thinks that wealthy US allies, especially Japan and Germany, free-ride. They should spend more so that we can spend less. But others have retorted that encouraging wealthy Asian allies like Korea and Japan to spend more could trigger an arms race in Asia that might also go nuclear. Barnett has a nice post on how Asian elites are aware of this and worry about a weak US. (On the other hand, there is not actually a lot of empirical evidence that denuclearization brings peace.)

In response to my commenters at Busan Haps on a US withdrawal from Korea, I wrote:

“America’s economic problems will likely compel the rebalancing all of you are thinking about. Importantly, even if the US wanted to stay and provide ‘extended deterrence’ as we have for 60 years, the dollars are not there for it.

Whether or not we should go is a different question. My sense is that Korea does actually try harder than many US allies. Korea spends 2.7% of GDP on defense. Germany and Japan spend around just 1%. The US spends close to 6%. But like Germany and Japan, Korea is now wealthy enough to spend a lot more. This raises the free-riding question you all worry about.

If Korea really wants USFK to stay no matter what, then the most likely way is for Korea to pay for ALL of the expense of USFK here. Right Korea and the US split the bill roughly so far as I can tell.

But I find great resistance to this thinking. My sense is that within the Beltway, there is strong elite consensus for the US remain committed around the world. ‘Empire’ seems to be a knack or a habit Americans have grown into. We like being a globally present superpower but are increasingly unable to afford it and unwilling to pay the taxes for it.

The question then is what do we do now? Cut entitlements (Medicare, Medicaid, Social Security) to make room for defense? Do we raise taxes enormously for all these things? Are do we retrench from our global posture so we spend less money?

Finally, there is a model for retrenchment. Britain slowly retreated from its empire in the 1950s and 60s. In some places it went very badly – South Asia and southern Africa especially. But this slowly brought British commitments back into line with British resources. The alternative for the US is to change nothing and risk an imperial crack-up – something like the USSR in 1989 or Austro-Hungary in 1914. That is my worry.”

Here are two good recent articles from the Wall Street Journal by Leslie Gelb and Max Boot on whether or not we can drawdown from Afghanistan and Pakistan (AfPak) post-bin Laden. I lean toward Gelb, but I think Boot makes some good points. Particularly, Boot notes that a US presence in Afghanistan made it possible to get OBL, because US forces were proximate. But Boot still sidesteps the debt issue. Both Beinart and the US JSC chairman call the debt the biggest threat to US national security. I am inclined to agree…